Health care: health savings accounts provide savings and choice.As most small business owners know, they would rather be running their business than running their health plan. After all, while important to employee wellbeing, paying for and managing health benefits are resource and energy intensive and take away from bringing in new business and revenue for the company. But a new provision in the Medicare prescription drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, law passed by Congress in late 2003 is starting to take hold in the California group insurance market for small businesses. And this may very well be worth a look by small business employers and their employees. Allowing people to set aside pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. to pay medical costs, the provision created Health Savings Accounts A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. (HSA's) that when combined with high-deductible health plans (HDHP HDHP High Deductible Health Plan ), can significantly lower both the overall cost to employers and employees for health insurance. A significant portion of small businesses with 50 or fewer employees do not offer health insurance to their employees. The HDHP/HSA combination can offer savings for companies already offering health insurance, and may allow small businesses that do not currently provide health insurance to start an employee benefits program. As an example, with the HDHP/HSA combination, employers who in the past paid monthly premiums of $1,000 per employee for coverage can now pay $300-400 toward plan costs, and this covers 100% of the employee premium. The advantage of high deductibles is that they provide affordable premiums. And, with companies that offer these plans potentially paying some--or all--of the premiums as well as having the employer and employee able to contribute to the savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: , a tax-deductible account similar to an individual retirement account is created for the employee. "While some people are worried about the high deductible costs to employees," says John Grgurina, President of PacAdvantage, a nonprofit company specializing in offering health insurance choice to companies 50 or smaller, "others see it as a great way to provide incentive for employees to help better manage health costs overall. And, the effective use of health savings" accounts can actually reduce total out-of-pocket costs out-of-pocket costs Managed care Health care costs that a covered person must pay out of pocket–eg, coinsurance, deductibles, etc. See Copayment. an employee may incur when compared to coverage they may already have." Generally, to qualify, the HDHP must have a deductible of at least $1,000 to be eligible for a companion health savings account. Employees, and/or the employers making contributions on the employees behalf, make tax-free contributions to the HSA HSA Health Savings Account (US) HSA Human Serum Albumin HSA Human Services Agency (Nevada) HSA Health Services Agency HSA Health and Safety Authority (Ireland) up to the insurance plan deductible (maximum deductibles for this year are $2,600 for an individual and $5,150 for a family). When the insurance policy deductible is higher than what can be placed into the HSA account, the difference in cost is the employee's responsibility. However, to prevent financial disaster for the employee, the out-of-pocket maximum is capped at $5,000 for an individual and $10,000 for families. So, assuming no catastrophic medical needs, over time it is possible for the employee to build a savings account for medical expenses that will support future expenditures and effectively eliminate any difference between the deductible amount and the amount contributed in any one year. That account can continue to build, like an I.R.A. If the employee withdraws money from this account for something other than health care, taxes and penalties must be paid. However, at age 65, the employee can withdraw money to pay for health care without taxes or penalty. And if used for something other than healthcare after age 65, the money is only taxed and no penalty is incurred. "These plans are a great tool for many employers and their employees," says Grgurina, "and while they can provide great cost savings, they aren't necessarily for everyone. This leads directly to the appeal of a company like ours that offers choice of plans and carriers to the employees. Those individuals who want the HSA-compatible plans can get it, while others can select the more traditional PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there and HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, plans." There are companies out there that specialize in the administration of HSA plans and simplify the process for both the employer and employee. The introduction of bank debit cards debit card, card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account. is one way these plans continue to be simplified. Plans that incorporate choice and offer employees limited financial responsibility can ease the way to lower premiums. The insurance broker is a good resource for additional information. Rather than being a passing fad, consumer-directed healthcare could play an important role in incorporating financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against and consumer choice into our ideas of traditional health insurance. "We understand employers want to offer their employees benefits that are meaningful ... on a personal level." says Grgurina, "And with trends showing employees will be carrying more and more of the cost of healthcare, as evidenced by examples like the HSA combinations being talked about here, we see the need for choice as growing to be a dominant consideration as consumerism consumerism Movement or policies aimed at regulating the products, services, methods, and standards of manufacturers, sellers, and advertisers in the interests of the buyer. decision making further enters healthcare. We believe smart companies are developing strategies to meet these changes." Information for this article was provided by PacAdvantage, which has representation throughout the state of California, and can be contacted at 877-735-5742 or via their website at www.pacadvantage.org. RELATED ARTICLE: Stressed? Relax with these techniques. BY WILLIAM B. CHIN, MD The demands of every day life create stress in all of us. It can be the aggravation Any circumstances surrounding the commission of a crime that increase its seriousness or add to its injurious consequences. Such circumstances are not essential elements of the crime but go above and beyond them. of rush hour traffic, an unpleasant encounter, life's incessant demands. When stress builds, it can damage your health and relationships. Research has consistently shown that stress can play a role in increasing your risk of heart attack and stroke. Stress tends to have negative effects upon healthy habits healthy habit Good habit, see there . Look for these signs of stress: * Difficulty in sleeping * Irritability irritability /ir·ri·ta·bil·i·ty/ (ir?i-tah-bil´i-te) the quality of being irritable. myotatic irritability the ability of a muscle to contract in response to stretching. , anger or chronic anxiety * Changes in eating habits * Recurrent illness, especially headaches and stomach aches * Muscle tension and aches * Increased use of alcohol, tobacco or other drugs If you encounter these problems, discuss them with your doctor. Your doctor will want to ensure that there are no underlying physical causes for these symptoms and will have suggestions on coping with stress. Relax with these techniques: * Exercise. Walk. Bicyccle. Go to the gym. Golf. Take time to move in exercisess you enjoy. * Do simple stretches at your desk at work. If you're stuck in traffic, do head, shoulder and neck rolls. * Eat a balanced diet balanced diet n. A diet that furnishes in proper proportions all of the nutrients necessary for adequate nutrition. balanced diet low in fat, high in fiber. People who are stressed tend to overeat o·ver·eat v. To eat to excess, especially habitually. or eat "comfort" foods, which are not the most nutritious. * Set time aside each day to do what you enjoy - share a laugh, listen to music, spend quality time with someone you love. * Develop realistic expectations of yourself and others. Often, we want to do more than our schedules allow. The right doctor can make all the difference. If you're looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. a doctor, consider HealthCare Partners Medical Group, known for both quality of care delivery and patient satisfaction. Dr. Chin is Executive Medical Director for HealthCare Partners-HealthCare Partners Medical Group. For more information about HealthCare Partners Medical Group and its outstanding physicians, call (888) 715-4922 or go on-line to www.healthcarepartners.com. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion